Foreign banks allowed 100% subsidiaries
New Delhi: The Union Cabinet has permitted foreign banks to set up wholly-owned subsidiaries in India besides raising the foreign direct investment (FDI) limit in private banks to 74 per cent from 49 per cent. It also abolished FDI caps in technical and scientific journals and the petroleum and natural gas sector. It, however, decided against a hike in foreign investment in the tele- communications sector.

Foreign institutional investors (FIIs) can acquire up to 49 per cent stake in a private bank but within the 74 per cent overall foreign investment ceiling. The government earlier permitted 49 per cent FDI and an equal holding by FIIs, raising the foreign investment level to 98 per cent. The foreign holding will include investment by FIIs, non-resident Indians (NRIs) and stakes acquired through initial public offerings, private placements, American Depository Receipts and share acquisitions by existing shareholders.
Though wholly owned subsidiaries have been permitted in the banking sector, the government has decided to restrict foreign banks, which have already opened branches in India, from acquiring over 74 per cent stake in an existing private bank.
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IDBI Bank inks B2B tie-up with BPCL
Mumbai: IDBI Bank says it has entered into a business-to-business (B2B) e-commerce arrangement with oil major Bharat Petroleum Corporation Ltd (BPCL) to provide an automated payment and purchase process to the BPCL's corporate and industrial clients.

The arrangement will ensure an easy and secure method of payment without any time-lag between realisation of payments made by corporates and clearance of supplies by BPCL. This will also have other benefits such as funds transfer at no extra cost, savings on commission and funds in the pipeline and better synergy between finance, supplies and logistics, IDBI Bank managing director GV Nageswara Rao said.
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JP Morgan may buy Bank One for $60 billion
New York: JP Morgan Chase & Co Inc has agreed to buy Bank One Corp for about $60 billion, the Wall Street Journal's online edition said. Citing a person familiar with the matter, the Journal reported that the purchase is expected to be announced later on Wednesday. JP Morgan spokeswoman Kristin Lemkau and Bank One spokesman Tom Kelly both declined to comment.

A merger would preserve JP Morgan's position as the No 2 US bank by assets, behind Citigroup Inc. No 3 Bank of America Corp's pending purchase of FleetBoston Financial Corp would vault that combination past the current JP Morgan. "There is a real logic to it," said Bert Ely, a banking consultant at Ely & Co in Alexandria, Virginia. "The only thing I would wonder about is might a competing bid come in."
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